The contributors here seem tremendously knowledgeable so can I ask you for a book recommendation? I'm interested in the historical background of early Buddhist thought. I've read several introductions to Buddhism and I'm working my way (slowly) through reading the Majjhima Nikaya but I feel a little at sea as I don't have the background to contextualise the teachings. I find it extremely useful in getting a rounder understanding of any set of ideas to see why proponents of the ideas said what they said. By way of comparison, reading Marx is even more weird and difficult if you don't understand either the working conditions or social and economic organisation of 19th Europe or Hegelian thought so I'm really looking for something which does this for Buddhism (ie what was the social, political, cultural and ideological background against which the Buddha taught?). Can anyone recommend something?

Not directly answering your question, but if you are struggling with the Majjhima Nikaya you might find the book"In the Buddha's Words" by Bhikkhu Bodhi useful to put the Suttas in context. It contains a logical sequence ot Suttas from all of the NIkayas. http://wisdompubs.org/Pages/display.lasso?-KeyValue=104

Rupert Gethin's THE FOUNDATIONS OF BUDDHISM, easily and inexpensively gotten, provides a good historical od early Buddhist thought. I would also recommend Peter Harvey's AN INTRODUCTION TO BUDDHISM, which can be gotten cheaply used. An excellent essay is this:

Although I'm neither widely-read nor knowledgable in this area, but to know a little about the social, economic, and philosophical structures and conditions during the time in India, I recommend this book: